The Effect of Group, Shopping List and Income on Consumer Purchase Decision

Introduction

Manufacturers and retailers needs information related to the effect of in-store

stimuli on the consumer buying behavior inside the store. Manufacturers need this
information to make decisions about packaging, displays and to know extent to which
these in-store stimuli influence consumer purchasing behavior for their brands. Retailers
need such information to determine the efficiency of resources designed to stimulate
additional sales and perhaps to differentiate their store from those of competitors.
Obtaining such information is the purpose of this study.

Impulse buying or unplanned buying is a purchase decision that is made by the

shopper inside the store with no explicit recognition of the product before entering the
store (Stern, 1962). There are two explanations of why impulse buying occurs? The first
is “exposure to in-store stimuli”. The exposure to in-store stimuli means that theses
stimuli act as reminders to shopper of their needs. They help the shopper in making
purchase decisions and offer shopper new ways of satisfying needs. The second
explanation is the “customer commitment hypothesis” i.e. the unplanned purchases are
not actually unplanned at all but it is due to the methodology used to measure it, either
the shopper is unable or unwilling to commit time etc. (Kollat & Willett, 1967)

The study is conducted to find out the effect of different variables on the
consumer buying behavior inside the store. The main variables that are being analyzed
are group, shopping list and income. Whereas the main focus of this study is on the
unplanned and the brand switching behavior of shopper.
Rational

Due to the clutter created by the traditional advertising mediums, the

manufacturers are always in search of a new medium that can be more efficient. If we
take the example of televisions first there were only two channels that had 90%
viewership but now there are ninety channels that do not even have 20% viewership.
Although In-store advertising is an important medium for advertising but it is not being
used efficiently. It may be because of the fact that not much work has been done on this
medium for kohat district. Although stores in kohat are using in-store advertisements but
the lack of data related to the consumer buying behavior makes it difficult for the
manufacturer and retailer to work efficiently. This situation creates a space for this type
studies which would provide the information about the shoppers behavior inside the store
and the effect of different variable on their behavior.

Purpose of the study

The purpose of this study is hypothesis testing because the researcher is trying to
find the relationship that exists between group, shopping and income and their effect on
the consumer purchase behavior, specifically the unplanned and brand switching
behavior. The researcher also tried to find the rate of unplanned and brand switching
behavior for certain product categories.
 Research Methodology

Variables

Dependent variable.

The dependent variable is consumer buying behavior. The focus of this

study is on the unplanned and brand switching behavior of shoppers inside the store.

Independent variable.

For the purpose of this study two independent variables are selected i.e.

Shopping List

Income

Moderating variable.

For the purpose of this study, Group is a moderating variable.

Model
Relationship of the Variables

Dependent variable.

The main goal of the study is to understand the impact of different

variables on consumer buying behavior inside the store. Therefore consumer
buying behavior is dependent variable. But the focus of this research is on the
unplanned and brand switching behavior of shopper.

Independent variable.

Shopping list.

The shopping lists have a negative relation with the dependent

variable because a customer with a shopping list is less likely to make
unplanned or brand switching purchases.

Income.

Income has a direct/positive relation with the dependent variable

i.e. the more money consumer have in their pocket the more chance is that
they will make unplanned purchases.

Moderating variable.

Group.

Group is a moderating variable because it changes the relationship

of the independent variable with the dependent variable. Even if the
shoppers have a shopping list, but the presence of group may influence the
shopper to make unplanned or brand switching and vice versa. And in case
of income, the pocket is not allowing the customer to purchase an
unplanned product but the group emphasizes to do so and vice versa.
Research objectives

1. To find out whether the rate of unplanned purchasing is different for different
product categories or not. If different, what are those differences?

2. To find out the effect of variables such as shopping list, income and group on
consumer purchase decision.

This question will be further addressed through the following hypotheses:

2a. Ho: The greater the income the lesser will be the unplanned purchases.
Symbolically Ho: p < 0
Interpretations:
Where p represents co-relations between income and unplanned
purchases, which in this case is a negative relation, meaning that when one
increases other decreases.
H1: The greater the income the greater will be unplanned purchases.
Symbolically H1: p>0.
Interpretations:
Means there is positive relationship between income and unplanned
purchases. (The co-relation is positive). If one increases the other will also
increase.
2b. Ho: There is no relationship between shopping list and unplanned
purchases.
Symbolically Ho: p=0
Interpretations:
Where p represents co-relations between shopping list and unplanned
purchases, which in this case is equal to zero (i.e. no co-relation). Means there
is no relation between unplanned purchases and shopping list.
H1: There is a relationship between shopping list and unplanned purchases.
Symbolically Ho: p≠0
 Interpretations:
Where p represents co-relations between shopping list and unplanned
purchases, which in this case is no equal to zero.
3a. Ho: There is no relationship between Group and unplanned purchases.
Symbolically Ho: p=0
Interpretations:
Where p represents co-relations between group and unplanned purchases,
which in this case is equal to zero (i.e. no co-relation). Means there is no
relation between unplanned purchases and group.
H1: There is a relationship between group and unplanned purchases.
Symbolically Ho: p≠0
Interpretations:
Where p represents co-relations between group and unplanned purchases,
which in this case is not equal to zero.
3. To find out how the rate of brand switching behavior varies among different
product categories.

Types of Investigation

It is a co-relational study because the study is trying to find that whether income,
shopping list and group is associated with the unplanned and brand switching purchases?
If so, which of these contributes most to the variance in the unplanned purchases and
brand switching inside the stores?

Unit of analysis

The unit of analysis is individual customer because the individual shopper was
observed, questioned and interviewed while conducting the research.

Data collection (Questionnaires, observations)

The data was collected through questionnaires and observations of the shoppers
visiting the stores. The interviews from the shoppers were collected two times once when
the shoppers were entering the store and the 2nd when the shoppers were coming out of
the store. In the entry interview they were asked questions about the demographic
variables and their intentions to buy the products and in the exit interviews the shoppers
were questioned about the products that they really purchased and what made them to
make brand switching or unplanned purchases (if any).

Data analysis

The data was analyzed using SPSS (statistical package for social sciences).

Time horizon

A cross sectional data is collected from the field i.e. data is collected only once
for testing the hypothesis of research.

Sample size

Convenience sampling method was used to recruit the respondents because this
method gives data from large number of days with in few days. The sample was set as
100 respondents.

Pre-testing

Questionnaire was first tested on a group of five sample respondents. It was

revised thrice to provide a better communication tool to the respondents and to have
useful results.

Limitations of the study

The shopper may be unwilling or unable to describe their purchase intentions.

Asking the consumer about their intention while entering the store may affect their
purchase behavior. The researcher is constrained by time and the effort hence forth were
having effectiveness up to the mark of this much time given.
Scheme of the report

This report has been divided into five chapters.

Chapter#01 Introduction of the report

Chapter#02 Review of Literature

Chapter#03 Analysis

Chapter#04 Findings and Conclusion

Chapter#05 Recommendations and Future research